Cerberus to sell Freedom Group, maker of gun used in Newtown massacre
Private equity firm Cerberus Capital Management is distancing itself from Friday’s shooting at a Connecticut elementary school by selling the company that makes one of the weapons purportedly used in the attack.
Cerberus said in a statement Tuesday that it will abandon its investment in Freedom Group, which produces the Bushmaster line of firearms. Adam Lanza is believed to have used a .223-caliber Bushmaster AR-15 rifle -- the equivalent of the military’s M-16 weapon -- in his assault on Sandy Hook Elementary School.
The massacre left 26 people dead, 20 of them children, which Cerberus called a “tragic and devastating event,” a “watershed event that has raised the national debate on gun control to an unprecedented level.”
Cerberus bought Bushmaster in 2006 and eventually added other gunmakers to create Freedom Group. The firearms company, which also includes the Remington brand, has been in business 194 years and has more than 3,000 employees, according to its website.
As of a 2010 regulatory filing, Cerberus owns more than 95% of Freedom Group.
Freedom does not sell weapons or ammunition directly to consumers, making its sales legally through firearms dealers and distributors, Cerberus said.
“We do not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition,” Cerberus said in its statement.
But amid increasingly passionate arguments for and against stricter weapons laws, the firm said it wanted to focus on its investments, not on playing “statesmen or policy makers.”
“Our role is to make investments on behalf of our clients who are comprised of the pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals,” Cerberus said. “It is not our role to take positions, or attempt to shape or influence the gun control policy debate.”
On Monday, the California State Teachers’ Retirement System said it would review its investment in Cerberus. California Treasurer Bill Lockyer may order CalSTRS as well as the California Public Employees’ Retirement System to strip their portfolios of all investments in gun manufacturers.
By removing its association with Freedom and Bushmaster, Cerberus said it hopes to avoid “being drawn into the national debate.” Cerberus plans to return capital from the sale of its Freedom stake back to investors.
Beyond its financial ties to the shooting, Cerberus has a history in Newtown, where Sandy Hook Elementary is located. Martin Feinberg, father of Cerberus founder and Chief Executive Stephen Feinberg, lives in the town, according to Bloomberg News.
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